IoT 3 mins read

Jump on the direct-to-consumer bandwagon

Today, traditional consumer brands are focused on creating a DTC channel – but what does this mean to transport and logistics providers?

Sean Riley Sean Riley

The direct to consumer craze is forcing brands to become logistics companies, handling everything from fulfillment to shipping.

For years, traditional consumer brands have focused on creating relationships with their customers and fighting retailers for influence. With the rise of the Internet came an onslaught of new companies that solely provide products through a direct-to-consumer channel (DTC). Brands can avoid retailers altogether, but it also means they have responsibility for direct fulfillment and shipping.

Over the next two decades, a new class of startups emerged. In the US, this includes Warby Parker (eyeglasses) to Everlane (clothing) to Casper (mattresses) and The Honest Company (baby and beauty products). This first generation of DTC companies was defined by borrowed supply chains, web-only retail, direct distribution, social media marketing – and they had a specific visual brand identity that favored sans-serif typeface, pastel color palettes, and scalable logos for a variety of digital media. While they were investment darlings, 98% of DTC companies have failed.

Today, traditional consumer brands are focused on creating a DTC channel – but what does this mean to transport and logistics providers?

More shipments, more warehouses, more apps

The world has gone freight light. Average warehouse sizes have fallen by 9% since 2016 and the average length of a trucks’ haul has fallen by 25% over 10 years. Shipments under 50 pounds (suitable for parcels) have increased by nearly 5% a year – while those over 1,000 pounds have stagnated.

Shorter delivery times also creates a need for more warehouses—often smaller than they have been in the past and located closer to the homes of consumers.

Freight light means more shipments, in smaller increments and they are occurring at a faster rate. To support this, transport and logistics companies need more apps to communicate faster internally and with their ecosystem. They need to know what is where and when it is on the move, as well as if there are any delays due to fulfillment or even weather. This is provided by apps, and API management has been the mainstay of satisfying this need. As the freight light trend continues, more companies will need this critical capability to interact with their ecosystems in real time. More importantly, since so many DTC brands have come and gone, logistics companies will have to gear up quickly to work with the newer DTC providers.

The only way to ensure logistics and transportation providers can keep up is by ensuring its internal and external apps are working in harmony. This means integration. will be needed to quickly link new cloud-based SaaS apps that are being consumed by marketing, sales and operations to create, manage and sell their company’s last mile logistics services.

Jumping onto the DTC bandwagon is not as easy as it sounds – witness the 98% which have failed – but with API management in the cloud you stand a much better chance of making it work.